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Teaming Up Gives Advisors Edge Over Lone Wolves

December 31, 2015

The word “teaming” is more prominent now than it has ever been. On college campuses, students are being encouraged to work in teams and many industries have embraced teaming and collaboration to maximize ideas, potential and creativity within their organizations. In the financial services industry, however, this concept is still fairly new. Although brokerage houses have worked in teams for many years, it is not the same teaming structure we are seeing develop today.

The complexity of the current financial services landscape has made it impractical for a financial advisor to be a jack of all trades and bear expertise in the multiple areas of financial planning that clients require. Many factors are contributing to this complexity. As product manufacturers continue to compete on product riders and other marketing concepts, it can be difficult for one advisor to act as an expert on all of them.

As the modern family structure continues to evolve through second marriages and children from multiple marriages, new challenges have been introduced for financial planners. As Americans continue to live longer, those who are still working are being forced to provide for their children and their parents while saving for their own retirement at the same time.

It is this complexity that has led to the birth of financial services teams. Simply put, a financial services team is a cohort of advisors working and collaborating together to provide holistic planning to their mutual clients. Under this framework, the client is benefiting from a one-stop experience and receiving advice from a collaborative team versus an individual. Each member of the team provides a different area of focus, or expertise, which provides the client the ability to receive recommendations on a variety of financial planning needs.

My partner and I have been developing successful and highly productive financial services teams for more than a decade. Our firm currently has 175 financial advisors, including 103 advisors who are part of our 23 established teams. The results are compelling. As of the second quarter of 2015, our advisors working in teams are up an average of 28 percent over the prior year versus individual advisors, who are experiencing an average growth of 11 percent. Team members are averaging 39 percent more income during the same time period.

So why isn’t everyone working in a team? In theory, teaming seems logical and simple. Take advisors with different expertise and mesh them together. Unfortunately, it’s not always that simple. The team must work well together — they must trust one other and respect each other’s viewpoints. Our most successful teams were not forced into existence. Advisors through observation approach each other and begin the dialog on how they can partner. On average we recommend that advisors try this arrangement for a period of six months. This time frame lets the individuals engage in teaming and gauge communication, cultural fit and build trust.

Once the team is assembled, its members must work on creating structure to avoid unnecessary conflict, confusion and poor communication. To help teams avoid this we develop a team playbook. The playbook provides an operating model for the team that helps address common challenges. For example, the team should establish a leader and they require coaching and consultation on how to lead a successful team. Individual success is no longer the focus. A true team seeks merits and recognition as one and not as individuals.

I see the future of our industry continuing to embrace financial services teams. It is the right process for the client, and it provides advisors the guidance and support they seek in this challenging business.